United States of America
before the
Securities and Exchange Commission

November 5, 2002

Public Utility Holding Company Act of 1935
Release No. 27595

Applications of Enron Corp. for Exemptions Under the Public Utility Holding Company Act of 1935
(Nos. 70-9661 and 70-10056)

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Order Denying Motion of Southern California Edison Company to Intervene But Authorizing Participation on a Limited Basis

On October 7, 2002, the Securities and Exhange Commission ordered a hearing on Enron Corp.'s applications for exemption from all provisions of the Public Utility Holding Company Act of 1935 (the "Act"), except for Section 9(a)(2) (the "Order"). 1 The Order directed any person seeking either to intervene pursuant to Commission Rule of Practice 210(b) 2 or to participate in the hearing on a limited basis pursuant to Rule 210(c)3, to file a motion describing the nature and extent of the movant's interest with respect to each phase of the hearing. 4

On March 26, 2002, Southern California Edison Company ("Edison") filed a motion to intervene. 5 Edison states that it is a party to 20 long-term power purchase agreements with qualifying facilities ("QF") in which Enron has an ownership interest. Edison represents that under the Public Utilities Regulatory Policies Act of 1978, as implemented in California, it was required to enter into these agreements with QFs and that, as a result, it has to date paid billions in "overpayments, i.e., above-market costs associated with certain fixed energy and capacity pricing terms in many of the contracts." Edison estimates that under a recent series of agreements it has entered into, it will over the next five years make in excess of $100 million in "overpayments" for power purchases from QFs in which Enron has an ownership interest. Edison alleges that these overpayments "will ultimately be borne by Edison's ratepaying customers."

Act Section 19 provides that the hearing officer may admit as a party any representative of interested consumers or security holders, or any other person whose participation in the proceeding may be in the public interest or for the protection of investors or consumers. 6 This standard for discretionary intervention is incorporated into Rule 210(b)(1), which contains the additional proviso that "[n]o person, however, shall be admitted as a party to a proceeding by intervention unless it is determined that leave to participate pursuant to paragraph (c) of this rule would be inadequate for the protection of his or her interests." Applying this standard, it is clear that Edison has failed to establish a basis to allow it to intervene in this proceeding. Edison is neither an investor in, nor security holder of, Enron. Likewise, Edison does not indicate that it is a representative of interested consumers or that its participation is in the public interest for their protection. Rather, Edison speculates that if its estimate of future payments is correct, ratepayers in California will ultimate bear whatever "overpayments" Edison makes for power purchases from Enron-related QFs.

Edison also fails to address why leave to participate under Rule 210(c) would be inadequate. Given that Edison does not meet any of the criteria for intervention, its motion to intervene must be denied. Rule 210(c) provides, in relevant part, that "any person may seek leave to participate on a limited basis as a non-party participant as to any matter affecting the person's interests." Although Edison seeks intervention in this proceeding, I conclude that participation on a limited basis is necessarily included within a request to intervene. While no basis exists warranting Edison's intervention, its motion argues that the outcome of this proceeding may affect its interests in the 20 long-term power purchase agreements. Accordingly, Edison will be granted leave to participate on a limited basis.

IT IS ORDERED that, the motion of Edison to intervene, be and hereby is, DENIED; and it is further

ORDERED, that, pursuant to Rule 210(c)(1), Edison is granted leave to participate on a limited basis in this proceeding; and it is further

ORDERED, that the participation of Edison in this proceeding shall be limited to non-duplicative involvement, including the submission of any briefs, exhibits, evidence or other matters limited to issues germane to it interests; and it is further

ORDERED, that at any hearing in this proceeding, Edison may not introduce or cross-examine witnesses absent leave to do so.

Roel C. Campos
Commissioner

Endnotes

1 Holding Co. Act. Rel. No. 27574 (Oct. 7, 2002), 67 Fed. Reg. 63464. The Order contemplates a two-phase hearing: Phase I is for the limited purpose of determining whether Enron satisfies any of the particular criteria for an exemption under various sections of the Act. If a criterion for exemption is satisfied, Phase II will be for the purpose of determining whether granting an exemption to Enron would be detrimental to the public interest or the interest of investors or consumers.